For Webster-Calhoun Cooperative Telephone Association, a recent rule change by the Federal Communications Commission may not be having as strong an impact as other communities in Iowa, but it is changing the way WCCTA evaluates each and every project.
The Center for Economic Development and Business Research in the W. Frank Barton School of Business at Wichita State University recently conducted a study for the Iowa Telecommunications Association to show the reality of the FCC's rule changes.
While independent telecommunications companies have been sharing concerns over the last few years about the FCC's proposed changes, this independent study confirms the impact and reality which for many companies means slowing or halting the expansion of broadband availability in Iowa.
The study, based on a survey of 100 Iowa independent telecommunications companies, concludes that these companies will lose revenue because of the FCC's November 2011 Transformation Order on the Universal Service Fund and Intercarrier Compensation. The FCC's actions will result in a drop in high-cost USF funding to these companies in the amount of $47.1 million from 2012 to 2017, according to the study.
WCCTA forward-thinking vision put us ahead of the curve, completing a fiber build out prior to the release of the FCC's order. However, the cost associated with continued maintenance and equipment upgrades are tremendous and the rule change may not allow for adequate maintenance and upgrades. The revenue requirements originally projected to support this network are being reduced. These original revenue projections are what WCCTA based its build-out plans on. The game changed.
WCCTA serves the rural high cost areas well. It is Iowa's small, local telecommunications companies that have been supporting the network infrastructure across the state, especially in rural areas. These are often the only businesses willing to serve customers in sparsely populated areas, where providing service is much more costly than in densely populated urban areas.
Rural communities across Iowa in the process of expanding broadband capabilities are facing bigger challenges. The Governor recently announced a new initiative, "Connect Every Iowa," which focuses on the legislative recommendations needed to expand broadband to all Iowans and develop a long-term plan to make Iowa the most connected state in the Midwest.
Telecommunications companies responding to the survey said they would be forced to cut their work force almost 10 percent by 2017, resulting in a direct loss of $14.9 million in wages. Because rural local exchange carriers provide service in 97 of Iowa's 99 counties, the report says the resulting ripple effect will translate into a statewide loss of $25.8 million in wages, leading to an estimated loss of $2.3 million in income and sales tax revenue by 2017.
Broadband allows our rural customers the capability to access the world, work from home and communicate with family and friends. Our service areas are predominantly agricultural-based, and require access to markets and services to keep competitive in the growing global economy. Broadband is the lifeblood of these rural areas.
The FCC's actions will have an impact in Iowa's rural communities. These actions stand in the way of our communities' access to reliable and affordable broadband services.
I encourage you to reach out to your elected officials to voice your concerns and urge them to put pressure on the FCC to further investigate the economic impact of its rule changes Visit www.iowalinkedup.org and click on the "Take Action" tab.
Help ensure the ability of all Iowans to have affordable broadband.
Daryl Carlson is executive vice president and general manager of Webster-Calhoun Cooperative Telephone Association in Gowrie.